Blue Coat Systems (BCSI) had a solid report last night but in a trend I am seeing in some other sectors (namely retailers) provided guidance that was below analysts estimates.

Security hardware and software maker Blue Coat Systems Inc. on Thursday posted a profit for the fiscal fourth-quarter, lifted by higher sales as companies resumed spending on technology after a lull during the recession. But the company's guidance missed Wall Street's expectations.

For the current fiscal first quarter, Blue Coat said it expects to earn 35 cents to 40 cents per share, excluding items, on revenue of $121 million to $126 million. Analysts were looking for 40 cents per share and $132.1 million in revenue.

The stock is down over 20% in early trading (seems like a massive over reaction to these eyes) and unfortunately Riverbed Technology (RVBD) which competes in 1 of Blue Coat's 2 sectors is taking collateral damage this morning to the tune of -7%. Riverbed actually had begun to push it's head over some resistance areas yesterday so today's action is a bummer.

In the larger scheme of things, the past few weeks have been a quiet time for earnings reports but the ones that have come through have been mixed. Easy comparisons of the past year are quickly fading and analysts who are always behind the ball have been busy skyrocketing expectations for the future. Eventually they will go too far and even though Wall Street has now became a game of analysts low balling estimates so their investment banking arms can win future business by making CEOs look good - eventually we are going to reach a point where companies are unable to get out far enough in front of estimates to please the masses. I could see this beginning in earnest in around Q4.

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As for the market today, treat it like a holiday as most anyone who matters is probably already at the Hamptons... of course some of them left their computers behind to 'provide liquidity'. I will continue of the mantra that unless a large emotional event happens that brings in humans, the market will slog sideways or ever upward. We have a small divergence between 200 day exponential v simple moving averages with the former at S&P 1102 (which is where the S&P 500 was turned back this morning) and the latter at 1105. I am using S&P 1094 as my 'floor' for now which was the key level yesterday... as long as that holds it's just a care free Friday. I would be shocked by anything other than one of those days we trade in a 5-6 point S&P range for 6 hours straight while computers collect rebates for their role in churning the market.

Longer term the question remains - yet another V shaped bounce or do charts ever matter again? If we slice right through these 200 day moving averages as if they don't exist - it would be atypical but what hasn't been? Looking farther out into the future a lot of talk of some sort of resistance areas around S&P 1130 so if 1105 is broken to the upside today or next week, I'd expect a run to that level and then we'll assess. A week from now we have a big labor report which I assume all those long lost census jobs (which for some reason did not show up in earnest last month) appear.